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ReferenceStandard Terms

No oral side agreements exist. But they do!

The German Federal Court of Justice (BGH) has addressed the meaning of the clause “No oral side agreements exist”.

Peter Poleacov (updated )6 min

The empty corridor of a modern office with glass walls, a bench, and a kitchen unit

Background

So-called entire agreement clauses, for example:

  • “No oral side agreements exist”,

  • “No oral side agreements have been made”, or

  • “Oral side agreements do not exist”,

are intended, whether they are included as standard terms or individually negotiated, to confirm that the written contract contains all of the provisions the parties have agreed on with respect to the subject matter.

The German Federal Court of Justice (Bundesgerichtshof, BGH) has settled that such clauses merely restate the presumption of completeness and correctness of the written contract that already applies in any event. What is signed is presumed to be complete and correct. A party relying on an oral agreement that is not in the written contract can rebut this presumption only by proving that agreement.1 The entry article “Standard terms in B2B: freedom of contract is the exception” explains why standard-terms law reaches every clause that is pre-formulated for several contracts and that one side presents.

The case

A day-care provider leased commercial premises in a historic post office building. In section 3, the lease read: “The landlord will freshly renovate the premises before the start of the lease as agreed.” The two provisions usual in such contracts were in section 14: “No oral side agreements to this contract exist,” and a written-form requirement for amendments.

The tenant never paid the full rent, citing defects, and relied on an oral promise of additional glazing for the windows. The landlord pointed to section 14 and sued for around 43,000 euros in arrears.2

The decision

According to the BGH, an entire agreement clause cannot establish an irrebuttable presumption that no oral agreements exist. Nor can such a clause be read to mean that arrangements made during the pre-contractual negotiations no longer hold.3 It was precisely the phrase “as agreed” in section 3 that indicated the parties did not intend to depart from their pre-contractual arrangements on the state of the premises. The BGH left open whether an exception applies. It might apply where the contract does not address the subject of a pre-contractual promise at all and the recipient could, in the special circumstances of the case, understand the signing of the contract only as a withdrawal from the promise. That was not the case here, if only because of the phrase “as agreed.”4 The tenant’s appeal succeeded: the appellate court had made no findings at all on the alleged promise and must now do so.

Whether the clause is also invalid as a standard term depends on what it is meant to achieve. In the same decision, the BGH comments in passing on a form clause aiming at an irrebuttable presumption or at excluding pre-contractual arrangements. Such a clause would be “invalid in any event” in light of Sections 305b, 307, and 309 No. 12 of the German Civil Code (Bürgerliches Gesetzbuch, BGB).3 The plain clause does not aim at that: it merely restates the legal position and is therefore valid.5 That is the real finding. A party who writes “No oral side agreements exist” into its standard terms has a clause that is not invalid but does nothing.

The sister clause

The second provision of section 14 is the more common case in practice: amendments require written form. In its strictest version, the double written-form clause, even waiving the written-form requirement is supposed to require writing. That does not help either. The BGH left open whether such a clause is valid at all; where it is agreed as a standard term, it is in any event ineffective because individual agreements take priority.6 Individual agreements prevail regardless of form, including orally and by conduct, and even where the parties never gave the clause a thought. It is different only for a double written-form clause that was individually negotiated: there it matters whether the parties deliberately intended to override it.

What is at stake is shown by the case the BGH decided in 2017.6 The agreed use was storing and selling fabrics and sewing notions. Over the years, this had informally become a beverage business, approved by letters of confirmation and by acquiescence. Because that change of use was material and failed the written-form requirement of Section 550 BGB, the fixed-term lease counted as concluded for an indefinite period and could be terminated on ordinary notice. The tenant had to leave. The law now requires only text form, not written form, for leases of commercial premises (Section 578(1) sentence 2 and (2) BGB). An amendment agreed only orally or by conduct fails text form as well.

A look at England

The same illusion exists in England, only in a different place. In 2025, the Court of Appeal held that two companies were already bound on the broadcasting rights to the FIFA Club World Cup by two emails. An offer of 1.7 million US dollars, and a reply expressly accepting it and noting that contract drafting would now begin. That a formal contract was to follow usually changes nothing where the parties have agreed all essential terms. A party that does not yet want to be bound has to say so: “subject to contract,” or an equivalent formula. These parties had not used it, even though the licensor was familiar with such wording from other negotiations.7

In Germany a clause in standard terms cannot stop side agreements from applying. Individual agreements take priority. England is different. There the courts generally enforce an entire agreement clause in a signed contract if the clause expressly supersedes earlier agreements.8 But the plan to rely on the signed text alone can fail earlier. The contract may be formed before anyone signs. The reservation “subject to contract” has to be stated while it is still worth something.

Clauses that look like protection and achieve nothing are the typical result of copied templates; why that is predictable is covered in the article “Standard terms: template, generator, or lawyer?”.

Notes

  1. BGH, judgment of 3 March 2021 – XII ZR 92/19, para. 13, where the court says the clauses leave the other party free to offer counter-evidence (die Führung des Gegenbeweises offenlassen); on the burden of proof of the party relying on circumstances outside the document, BGH, judgment of 10 June 2016 – V ZR 295/14, para. 6, there on a notarial deed: it is not enough that the evidential effect is shaken. ↩

  2. BGH, judgment of 3 March 2021 – XII ZR 92/19, paras. 2 to 4, 6, and 11. ↩

  3. BGH, judgment of 3 March 2021 – XII ZR 92/19, para. 13. ↩1 2

  4. BGH, judgment of 3 March 2021 – XII ZR 92/19, para. 14. ↩

  5. BGH, judgment of 14 October 1999 – III ZR 203/98, reasons, part I 2 a and b, still under the former Standard Business Terms Act (AGBG); to the same effect Friedrich Graf von Westphalen, AGB-Recht im ersten Halbjahr 2021, NJW 2021, 2328 (para. 14): the entire agreement clause is purely declaratory, and either party may adduce counter-evidence. ↩

  6. BGH, order of 25 January 2017 – XII ZR 69/16. ↩1 2

  7. DAZN Ltd v Coupang Corp [2025] EWCA Civ 1083. For a German-language report on the decision, see Klaus Vorpeil, Neuere Entwicklungen im englischen Handels- und Wirtschaftsrecht, RIW 2026, 93, 93 f. ↩

  8. Axa Sun Life Services Plc v Campbell Martin Ltd [2011] EWCA Civ 133, [34] and [63]; there the clause excluded only collateral warranties, not claims for misrepresentations of fact made in the negotiations, ibid., [38] and [65]. ↩

Reference: Poleacov, P. (2026). No oral side agreements exist. But they do!. INN.LAW. https://inn.law/en/perspectives/entire-agreement-clause/